Only thing you need to do with boot.ini is delete it. The Earlier Version of Windows entry is in the BCD Data file that Win 7 uses to boot.
Easy to fix
Start msconfig (Winkey+R, type msconfig in the Run box, press Enter)
Click the Boot tab
Highlight the Earlier Version of Windows entry and click Delete
Check the box for Make all boot entries permanent (or reboot once first to test, then go back and check it).
Done
EDIT: I've seen some systems where msconfig doesn't list the Earlier Version of Windows Entry, have no idea why. Have to do it manually then, though EasyBCD should be able to remove it.
To do it manually, open an elevated command prompt
Click Start, type cmd, when cmd.exe appears in the list, right click it and click Run as Administrator
Type Bcdedit at the prompt.
This will list all the boot menu entries
One of the entries should look similar to this, though your partition might be different:
Windows Legacy OS Loader
------------------------
identifier {ntldr}
device partition=D:
path \ntldr
description Earlier Version of Windows
This is the Earlier Version of Windows (XP) entry. To delete it, type the following:
Bcdedit /delete {ntldr} /F